This is the second of a three-part series focusing on student loan debt and how it has altered the American Dream.
Last week, I discussed the plight of a young American who has built a family while working around student loan payments. That story happened to be my own. My wife and I have managed to build a solid foundation on which our young family can grow, but it hasn't been without financial struggle and stress. We've toed the fine line between saving, paying down debt, and managing our discretionary income in order to occasionally enjoy a good meal, a vacation, or a pool membership for our family in the summertime. With the right plan, there is a way to make all three viable. Of course there would be more opportunity for the former and latter if the middle didn't consume so much of our income. This post will explain how easy it was/is for a young person to rack up student loan debt, and most importantly, ways to help your kids to not get stuck in the same cycle as they work through their education.
How We Got Here
A simple Google search of "why is higher education so expensive" yields a result of over 30,000,000 hits - each of which gives it's own op-ed view of why the price of a degree has gone through the roof (I'll leave it to you to wade in that ocean should you choose). In actuality, all of which probably contain some semblance of the truth. Regardless of the rhyme and reason, the average cost of one year of tuition and room and board at a public university has nearly TRIPLED since the 1975. Whether or not your parents planned and saved to pay for your college, or if you were like me and had to figure out a way to get it done on your own, the bottom line is you probably needed some sort of assistance. No matter the amount, a vast majority of us are living with, and paying back the debt we incurred through college.
For me, it was simple. In high school I was a solid B+ student - although I probably could have spent more time in the books - or even taken one home occasionally (I never studied at home one day in high school; shoutout to study hall). I did enough to get the grades I needed to do the things I wanted to do. This way I could hone in on what really mattered: athletics and the social scene (Interestingly, my 3.2 and 23 ACT would not get me into OSU today). While I always knew I was going to college, I never really considered who was going to pay for it, nor was I educated about it. This is one area where the high school education system continues to fall ridiculously short - and I would venture to say it was even worse in when I graduated 14(?!) years ago. To be honest, a kid growing up under the circumstances I did is probably not a great candidate for the full, four-year college experience in the first place, at least from a financial standpoint, and had I been offered the options kids have today, my financial situation would likely be different.
While I was able to get roughly half of my undergraduate degree paid for through grants (because I lived with my grandparents), no one at my high school ever approached me about applying for scholarships, or possibly pursuing another route such as commuting rather than living on campus, going to a two-year school to knock out gen eds or start with an associates, or even trying out a trade in the career center. At 17, I filled out my own FASFA and basically made financial decisions that would affect the rest of my life with ZERO advice. I continued this process through my college years and even after a year in the "real world" when I decided to go back to get the Master's in Education that in the back of my mind I figured I would have to get; largely due to the occasion when after informing my English professor grandfather at the end of my sophomore year that I was going to major in English, he gifted me a book of obscure short stories, one of which authored by H. Turnip Smith, with the inscription, "Congratulations on becoming an English major. Prepare to starve." That degree was useful, but entirely financed, and represents the majority of my loan debt today.
Financial Education has to Start Earlier
As an educator, I started off working with at-risk students at the middle school level. These students were like me in that a majority grew up dealing with divorce, abuse and other problems that inherently lead to apathy to and/or dislike for education. At least in my case, education was always valued so I stuck to it regardless of what was going on around me. In contrast, I once had a kid in my class who lived in a car with his entire family. Would you really care about reading The Lightning Thief in second period if you had to try to sleep in a car in the middle of winter? When I moved on to teach at the high school level, I had the same types of students who I had at the younger levels, but these kids were on the verge of becoming adults and having to contribute to society. The curriculum in this program is this is much different. First, they need to pass the OGT, second, they are able to earn their credits online, finally, they learn responsibility and life skills (financial literacy included), and even get a job to earn money. I contend that these kids learn more about "real life" than us kids who were on the regular track sitting in Algebra II.
Three Ways We Can Prepare Our Kids
States across the country have begun to trickle career-based programs into the middle schools and offer them to younger students. There are many great schools out there who are mainstreaming this program across Ohio. When we were in high school, there was a stigma around this type of program. If I would have taken advantage of one, I might have had a better understanding of what I was getting into when I signed those Finanical Aid documents every year. While skills-based programs are a major key to success for America's future, and one potential cure for college-indebtedness, another great option is College Credit Plus. This program allows college-bound students to earn college credits while in high school. Why would we pay for credits that we can earn for free? I know that I will be targeting my son toward these types of programs as he advances through his education. Lastly, of course, it is always good to plan ahead using a 529 Plan, or an UTMA or Coverdell ESA. Figure out an amount that you can set aside and let it grow. Regardless of the amount you save, some is better than none at all. All this takes is a simple plan to get started, with which we'd love to help out! If this is something you've been thinking about and are ready to get to it, or if you want to receive more financial education, planning and updates, Wealth Club is the place to be. Click on the Launch Week Bonus tab to get started and two things will happen (1. you'll save $50 on enrollment and 2. we'll be in contact to help get the ball rolling)!
